Arab stock markets fall as commodities leap

RobertDaniel

TEL AVIV (MarketWatch) — Stock markets in the Arab world fell and key commodity prices leaped Monday, as demonstrators dug in throughout the Mideast and North Africa, demanding more political and economic freedom.

Protests in the Arab world have spread in the wake of the recent overthrow of Tunisia’s leader, Zine El Abidine Ben Ali, and of Egypt’s president, Hosni Mubarak.

The region’s tensions sent gold surging past $1,400 an ounce in electronic trading Monday on Globex. Investors often view the precious metal as a safe haven during political and economic turmoil. Read more about gold.

Silver futures also jumped, exceeding $33 an ounce.

And oil — specifically Brent benchmark crude — soared past $104 a barrel as investors worried about possible oil-supply disruption from Libya, which has the largest proved oil reserves in Africa. Read more about oil trading.

On the Dubai Financial Market, the benchmark DFM index finished down 1.3%. The most actively traded issue by volume was Air Arabia, trading up 1.9%. Emaar Properties was the most active by value, off 1.3%.

The Qatar Exchange’s benchmark QE index slipped 0.9%. The General index on the Abu Dhabi Securities Exchange declined 0.5%. The Bahrain Bourse’s All Share index eased 0.4% at the close.

The stock market in Egypt remained closed Monday, and it was unclear when it would reopen.

Events in Libya led Monday’s news reports, with President Moammar Gadhafi’s son announcing that the government’s forces would fight to protect his father’s regime.

Government forces have been firing on protesters who are demanding an end to Gadhafi’s 42-year reign, and reports said that more than 200 people have died in protests.

Fitch downgrades Libya’s ratings

Fitch Ratings downgraded Libya’s long-term foreign and local currency ratings to BBB from BBB-plus and placed them both on a negative rating watch Monday.

“The downgrade reflects the eruption of political risk evidenced by the increasing momentum of the popular uprising aimed at ending Moammar Gadhafi’s 42-year rule,” said Charles Seville, director in Fitch’s sovereign ratings group.

The lack of a political resolution to the conflict and escalating violence would likely result in a further downgrade, Fitch said.

Libya is the sixth-largest per-capita oil producer in the world, but long-term growth performance since 1970 has been weak, according to the ratings agency.

Unemployment is estimated at 20%, with most Libyans reliant on relatively low-paid government jobs and subsidized goods, Fitch said.

Italy’s Eni SpA (ENI), Austria’s OMV AG, the U.K.’s BP PLC
BP, -0.97%
(BP.) and France’s Total SA
TOT, -1.66%
(FP) were among the companies that said Monday they were beginning to evacuate some of their personnel from Libya.

Protests in Manama, Bahrain, entered their ninth day, reports said. The majority Shiites there are demanding a new government in the Sunni-ruled country. The island nation is the home of the U.S. Navy’s Fifth Fleet.

In Yemen, President Ali Abdullah Saleh said Monday that he would step down only if he were defeated in an election, according to an AFP report. He spoke even as opposition members of parliament there joined protesters in demands that he resign, the news agency reported.

Egypt’s Muslim Brotherhood rejected the country’s move Sunday to shuffle the cabinet. The changes named a number of former Mubarak opponents to the cabinet but also left unchanged a number of key portfolios, Reuters reported.

On Sunday, protesters in Rabat, Morocco’s capital, demanded changes in the monarchy’s constitution. The demonstrations confounded the views of a number of analysts, who thought Morocco, which ranks high in Freedom House’s regional indexes of political representation, would escape the demands for more freedoms, The Wall Street Journal reported.

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